Senior Credit Analyst, Lucror Analytics

Leonard Law, CFA

Senior Credit Analyst

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

Credit

The Asia HY Trade Book for the month of November includes a summary of our recommendations, as well as our high-conviction ideas. The report also features relative value charts and lists of the bonds in the Lucror Asia HY index.

  The Asia HY Trade Book for the month of November includes a summary of our recommendations, as well as our high-conviction ideas. The report also features relative value charts and lists of the bonds in the Lucror Asia HY index. 

Asia HY Trade Book - November 2020 - Lucror Analytics

Trung Nguyen

In our view, Azure's Q2/20-21 results were slightly better than expected. Revenue came in at the high end of guidance, while profitability was in line, after adjusting for the share appreciation rights. Cash flow improved, with better cash collection from overdue customers. On the back of the higher earnings, consolidated leverage and coverage ratios ameliorated but remained aggressive, with inadequate coverage ratios. In conjunction with this release, Azure has started to disclose its own version of leverage, i.e. Net Debt/EBITDA for operating assets, to remove the effect of debt incurred for construction of new projects which are not yet generating EBITDA. This metric was at 5.9x, which we deem acceptable. Liquidity was weak considering the company\s large capex requirements. We revise our recommendation to "Hold" from "Buy" on the AZUPOE Notes, despite strong fundamentals, as the Notes have rallied substantially since our initial "Buy" recommendation (at 7-8% yields), such that there is very little upside left, with the '22s yielding 1.6% and the '24s yielding 3.7%.

  In our view, Azure's Q2/20-21 results were slightly better than expected. Revenue came in at the high end of guidance, while profitability was in line, after adjusting for the share appreciation rights. Cash flow improved, with better cash collection from overdue customers. On the back of the higher earnings, consolidated leverage and coverage ratios ameliorated but remained aggressive, with inadequate coverage ratios. In conjunction with this release, Azure has started to disclose its own version of leverage, i.e. Net Debt/EBITDA for operating assets, to remove the effect of debt incurred for construction of new projects which are not yet generating EBITDA. This metric was at 5.9x, which we deem acceptable. Liquidity was weak considering the company\s large capex requirements.   We revise our recommendation to "Hold" from "Buy" on the AZUPOE Notes, despite strong fundamentals, as the Notes have rallied substantially since our initial "Buy" recommendation (at 7-8% yields), such that there is very little upside left, with the '22s yielding 1.6% and the '24s yielding 3.7%. 

Azure Power - Earnings Flash - Q2 FY 2020-21 Results - Lucror Analytics

In this month’s “In-Focus” section, we provide an update to our 2018 analysis of returns and volatility for unrated Chinese issuers. Since our first report, the number of such issuers has increased notably. At the same time, with the Lucror Chinese Industrial index having run since 1 January 2018, we can now better compare the unrated issuers' performance relative to peers. The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks, and discussing specific areas of interest in the “In-Focus” section. The Asia Monthly is intended to broaden investors' understanding of the Asian USD high-yield market.

  In this month’s “In-Focus” section, we provide an update to our 2018 analysis of returns and volatility for unrated Chinese issuers. Since our first report, the number of such issuers has increased notably. At the same time, with the Lucror Chinese Industrial index having run since 1 January 2018, we can now better compare the unrated issuers' performance relative to peers.   The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks, and discussing specific areas of interest in the “In-Focus” section. The Asia Monthly is intended to broaden investors' understanding of the Asian USD high-yield market.  

Asia HY Monthly - Returns And Volatility For Unrated Chinese Issuers (2020) - Lucror Analytics

The Asia HY Trade Book for the month of October includes a summary of our recommendations, as well as our high-conviction ideas. The report also features relative value charts and lists of the bonds in the Lucror Asia HY index.

  The Asia HY Trade Book for the month of October includes a summary of our recommendations, as well as our high-conviction ideas. The report also features relative value charts and lists of the bonds in the Lucror Asia HY index. 

Asia HY Trade Book - October 2020 - Lucror Analytics

In this month’s “In-Focus” section, we consider China’s new Three Red Lines leverage guidelines for developers, which have been rolled out on a limited basis. We also look at the context for the policy’s introduction and its implications on credit access for industry players at large.  The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks, and discussing specific areas of interest in the “In-Focus” section. The Asia Monthly is intended to broaden investors' understanding of the Asian USD high-yield market.

  In this month’s “In-Focus” section, we consider China’s new Three Red Lines leverage guidelines for developers, which have been rolled out on a limited basis. We also look at the context for the policy’s introduction and its implications on credit access for industry players at large.    The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks, and discussing specific areas of interest in the “In-Focus” section. The Asia Monthly is intended to broaden investors' understanding of the Asian USD high-yield market.  

Asia HY Monthly - China's Three Red Lines - Lucror Analytics

India

Azure Power Global Limited operates as an independent solar power producer. The Company designs, constructs, maintains, and operates solar energy projects. Azure Power Global serves customers worldwide.

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Azure Power Global Ltd (AZRE US)

Asia HY Trade Book - November 2020 - Lucror Analytics

The Asia HY Trade Book for the month of November includes a summary of our recommendations, as well as our high-conviction ideas. The report also...

Lucror Analytics

Azure Power - Earnings Flash - Q2 FY 2020-21 Results - Lucror Analytics

In our view, Azure's Q2/20-21 results were slightly better than expected. Revenue came in at the high end of guidance, while profitability was in...

Lucror Analytics

Asia HY Monthly - Returns And Volatility For Unrated Chinese Issuers (2020) - Lucror Analytics

In this month’s “In-Focus” section, we provide an update to our 2018 analysis of returns and volatility for unrated Chinese issuers. Since our...

Lucror Analytics

Asia HY Trade Book - October 2020 - Lucror Analytics

The Asia HY Trade Book for the month of October includes a summary of our recommendations, as well as our high-conviction ideas. The report also...

Lucror Analytics

Asia HY Monthly - China's Three Red Lines - Lucror Analytics

In this month’s “In-Focus” section, we consider China’s new Three Red Lines leverage guidelines for developers, which have been rolled out on a...

Lucror Analytics

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